Australia has 367 major resources and energy projects in its development pipeline, representing over $500 billion in possible investment, according to the Commonwealth Department of Industry’s new major projects report.
Released at the end of each calendar year, the Resources and Energy Major Projects publication is an annual review of projects which seek to extend, increase, or improve the quality of mineral commodity output in Australia.
The 2021 publication, released on 20 December, says “significant opportunities” were emerging for Australia’s resources and energy sector “especially in the new energy economy”.
“Our outlook for resources and energy investment suggests that 2021 represented significant growth in the resources investment cycle,” the report says.
“The value of ‘committed’ resource and energy projects — those where a final investment decision (FID) has been taken — increased by 24% over the past year to $54 billion.
“This continuing growth in value was driven by iron ore and battery metals projects. The jump in publicly announced projects largely comes from our first inclusion of hydrogen.
“With this expanded scope, the total value of projects in the investment pipeline is at $504 billion.”
The report includes a breakdown of proposed major projects by commodity and across four stages of development – publicly announced; feasibility; committed; and completed.
Major project employment outlook
The report estimates the 79 projects included in the ‘committed’ phase, worth $54.3bn, would bring around 25,100 construction jobs and 8,300 ongoing operational phase jobs.
Factoring in job estimates from projects in earlier phases of development (see full list of projects in spreadsheet download), suggests over 165,000 jobs would be on offer should Australia secure the majority of new project investment.
Speaking with The Australian’s Joe Kelly on 31 December (‘Skills Crisis a threat to jobs bonanza’), AREEA CEO Steve Knott AM said the possible employment growth, whilst ‘extremely positive’, could exacerbate the present skills shortages being felt across the industry.
“If a good number of the prospective projects identified by the Department of Industry proceed, we could be looking at unprecedented skills shortages of up to 100,000 in the sector over the next 5 years,” Mr Knott said.
“This is on top of already chronic skill shortages and operational challenges caused by FIFO disruptions, labour immobility and skilled migration restrictions all created by the COVID-19 pandemic.”
(Note: AREEA publishes an annual workforce forecasting report based on projects considered ‘likely’ to proceed within the government’s major projects list. The 2022 edition is scheduled for publication in March).
Record $379bn earnings forecast for resources, energy exports
In addition to its analysis of the future project pipeline, the latest Resources and Energy report showed commodity export earnings are forecast to reach a new record $379 billion in 2021–22.
This strength in export earnings is being driven by high commodity prices, good volume growth and a weak Australian dollar, as well as surging demand for Australian coal and gas in the face of a global energy shortage.
Minister for Resources and Water, Keith Pitt, said the resources sector had again been shown to be the bedrock of the Australian economy.
“The resources sector has risen above the challenges of the pandemic and will continue to deliver for our nation in the years ahead,” Minister Pitt said.
“In 2020–21 our resources and energy earnings passed $300 billion for the first time, reaching $310 billion, and are now forecast to top that by $69 billion in 2021–22.
“These are outstanding results that will provide further jobs and opportunities in our regions and benefit all Australians.
“The higher forecast earnings are expected to keep the benefits flowing to the broader community, including through royalties the states use to pay for the hospitals, roads and schools, the services we all rely on.”
To download the latest Resources and Energy Major Projects report, visit the Department’s website.
For more information on AREEA’s annual Workforce Forecasting report series, contact [email protected].